First National Building Society showed no sign of jitters this week when it reaffirmed that its plans for a flotation in October are still very much on track irrespective of the turmoil in the markets. Group managing director, Mr John Smyth, conceded the board will be closely watching trends but pointed out that despite the current uncertainties, share values were higher than when the flotation was first announced last September. The worst-case scenario for First National would be if fund managers begin to shy away from equities - transferring their holdings into the more secure bond markets. But the prospects of that happening appear to be fairly remote at this stage.

First National management is reporting a strong appetite from institutional investors and from its own members who will be invited to subscribe for shares at the offer price. It had initially hoped the flotation would raise £150 million but has since scaled this back to £100 million.

The building society's last results as a mutual showed a 79 per cent jump in pre-tax profits to £19.6 million in the six months to the end of June. This performance was greatly enhanced by its own investments in the London Stock Market. First National had purchased shares in a number of British building societies which came to the market in recent years. It realised a handsome profit of £4.6 million by selling some of these.

However, growth in First National's lending business failed to expand as fast as its rivals. The society insists that it is only interested in achieving profitable lending growth and is not aggressively chasing new lending just to boost its figures. But it remains one of the most expensive institutions for mortgages - a factor which will not have been lost on potential customers in the highly competitive mortgage market.